Are you interested in becoming a Mutual Funds Distributor and helping investors manage their mutual fund investments? All you need to do is appear for the NISM V-A exam and receive the certification to become a registered Mutual Funds Distributor.
Here are eight simple guidelines to help you in your journey to appear & qualify for the NISM V-A exam and obtain the NISM VA Certification for becoming a registered Mutual Funds Distributor. Read through the bonus point: How to commence your business and become a successful Mutual Funds Distributor!
Objectives of NISM V-A Examination
The NISM Series V-A Certification aims to make candidates:
Know the basics of mutual funds, including their features, structure, and various mutual fund schemes.
Understand the process of distributing mutual funds in the marketplace, evaluate mutual fund schemes, and recommend suitable products and services to existing and prospective investors in the market.
Become familiar with the legal, accounting, valuation, and taxation aspects of mutual funds and their distribution.
Practice financial planning as an approach to investing in mutual funds, and develop long-term relationships with their clients.
What Kind of Courses Does the NISM Offer?
The National Institute of Securities Markets (NISM) provides a diverse array of educational courses aimed at enhancing knowledge and skills in the financial sector. Established in 2006 by the Securities and Exchange Board of India (SEBI), NISM focuses on offering specialized certifications and training programs.
Course Categories Offered by NISM Include:
Currency Derivatives: Learn the intricacies of trading and managing currency derivatives.
Investment Advisory: Gain expertise in offering professional investment advice and financial planning.
Merchant Banking: Develop skills in managing public offerings, mergers, and acquisitions.
NISM's training programs are designed to cater to a wide spectrum of financial professionals, from beginners to experienced practitioners, ensuring that all participants have the opportunity to excel in their respective fields.
Eligibility to Appear for the NISM V-A EXAM
Candidates eligible to appear for the NISM V-A exam include individuals above 18 years of age who have completed a minimum of three years bachelors degree from any recognized educational institution and who,
Are employees of organizations working as mutual fund distributors.
Are employees of any Asset Management Company (AMC), especially those involved in the sales/distribution of mutual funds or
Want to begin a career in the sale/ distribution of mutual funds.
The Pattern of NISM V-A EXAM
The most important step to succeed in any exam is to have a good knowledge of the syllabus covered, including marks and examination patterns. Here is a quick glimpse of the syllabus and exam pattern of the NISM V-A examination.
It is an offline computer-based exam, meaning the candidates must physically appear at the exam center location.
The exam has 100 multiple-choice questions for 100 marks, and the duration is 2 hours (120 minutes).
The minimum pass mark is 50%, with no negative marking for incorrect answers.
The candidate must pay an amount of Rs.1,500 + GST to register for the NISM V-A exam.
The exam is conducted at various locations across India.
What is the Validity Period of a Candidate’s Enrollment for the NISM Exam?
When you enroll for the NISM exam, your enrollment is valid for a period of 180 days. This means you have six months from the date of enrollment to schedule and take your exam. After this period, if you haven't taken the exam, your registration will expire, and you'll need to re-enroll to take the test.
Syllabus of NISM V-A EXAM
The detailed syllabus of the NISM V-A Exam including the chapters and contents of each chapter as provided in the official study material is produced here for your immediate reference. This will help you gather an idea as to what you will study and will help prepare accordingly.
CHAPTER 1: INVESTMENT LANDSCAPE
Investors and their Financial Goals |
Savings or Investments? |
Different Asset Classes |
Investment Risks |
Measures and Management Strategies |
Behavioral Biases in Investment Decision-Making |
Risk Profiling |
Understanding Asset Allocation |
Do-it-yourself versus Taking Professional Help |
CHAPTER 2: CONCEPT AND ROLE OF A MUTUAL FUND
Concept of a Mutual fund |
Classification of Mutual Funds |
Growth of the mutual fund industry in India |
CHAPTER 3: LEGAL STRUCTURE OF MUTUAL FUNDS IN INDIA
Structure of Mutual Funds in India |
Constituents of a Mutual Fund |
Organization Structure of Asset Management Company |
Role and Support Function of Service Providers |
Role and Function of AMFI |
CHAPTER 4: LEGAL AND REGULATORY FRAMEWORK
Role of Regulators in India |
Role of the Securities and Exchange Board of India |
Due Diligence Process by AMCs for Distributors of Mutual Funds |
Investor Grievance Redress Mechanism |
AMFI Code of Conduct for Intermediaries |
The Role of the National Institute of Securities Market (NISM)
The National Institute of Securities Market (NISM) plays a crucial role in enhancing the standards and professionalism within the securities markets. Established in 2006 by the Securities and Exchange Board of India (SEBI), NISM serves as the educational arm of this regulatory authority.
Key Functions and Offerings
Educational Programs: NISM conducts a diverse range of courses designed to educate and certify market participants. These courses cover areas such as currency derivatives, investment advisory, and merchant banking.
Certification: By providing certifications, NISM ensures that market participants possess the necessary knowledge and skills. These credentials are recognized within the industry, helping professionals to establish credibility.
Standardization: Through its curriculum and programs, NISM aims to standardize practices within the securities market. This effort helps in maintaining consistent and high standards across the industry.
Structure and Reach
NISM operates through six dedicated schools, each focusing on different aspects of the securities markets. These schools work to disseminate knowledge, promote best practices, and enhance the overall professionalism of market players.
In summary, NISM functions as a pivotal institution fostering education, certification, and standardization in the securities markets, contributing significantly to the growth and integrity of the financial sector in India.
CHAPTER 5: SCHEME RELATED INFORMATION
Mandatory Documents |
Non-Mandatory Disclosures |
CHAPTER 6: FUND DISTRIBUTION AND CHANNEL MANAGEMENT PRACTICES
The role and importance of mutual fund distributors |
Different kinds of mutual fund distributors |
Modes of distribution |
Prerequisites to become Distributor of a Mutual Fund |
Revenue for a mutual fund distributor |
Commission Disclosure mandated by SEBI |
Due Diligence Process by AMCs for Distributors of Mutual Funds |
Difference between distributors and Investment Advisors |
Nomination facilities to Agents/Distributors and Payment of Commission to Nominee |
CHAPTER 7: NET ASSET VALUE, TOTAL EXPENSE RATIO, AND PRICING OF UNITS
Fair Valuation Principles |
Computation of Net Assets of Mutual Fund Scheme and NAV |
Dividends & Distributable Reserves |
Concept of Entry and Exit Load and its impact on NAV |
Key Accounting and Reporting Requirements |
NAV, Total expense ratio, and pricing of units for the Segregated Portfolio |
CHAPTER8: TAXATION
Applicability of taxes in respect of mutual funds |
Capital Gains |
Dividend income |
Stamp Duty on Mutual Fund Units |
Setting off of Capital Gains and Losses under the Income Tax Act |
Securities Transaction Tax |
Tax benefit under Section 80C of the Income Tax Act |
Tax Deducted at Source |
Applicability of GST |
CHAPTER 9: INVESTOR SERVICES
The NFO process |
New Fund Offer Price/On-going Offer Price for Subscription |
Investment Plans and Services |
Allotment of Units to the Investor |
Account statements for investments |
Mutual Fund Investors |
Filling the Application Form for Mutual Funds |
Financial Transactions with Mutual Funds |
Cut-off Time and Time Stamping |
KYC Requirements for Mutual Fund Investors |
Systematic Transactions |
Operational Aspects of Systematic Transactions |
Non-Financial Transactions in Mutual Funds |
Change in Status of Special Investor Categories |
Investor transactions – turnaround times |
CHAPTER 10: RISK, RETURN AND PERFORMANCE OF FUNDS
General and Specific Risk Factors |
Factors that affect mutual fund performance |
Drivers of Returns and Risk in a Scheme |
Measures of Returns |
SEBI Norms Regarding Representation of Returns by Mutual Funds in India |
Risks in fund investing with a focus on investors |
Measures of Risk |
Certain Provisions with respect to Credit risk |
CHAPTER 11: MUTUAL FUND SCHEME PERFORMANCE
Benchmarks and Performance |
Price Return Index or Total Return Index |
Basis of Choosing an appropriate performance benchmark |
Benchmarks for equity schemes |
Benchmarks for Debt Schemes |
Benchmarks for Other Schemes |
Quantitative Measures of Fund Manager Performance |
Tracking Error |
Scheme Performance Disclosure |
CHAPTER 12: MUTUAL FUND SCHEME SELECTION
Scheme Selection based on Investor needs, preferences, and risk profile |
Risk levels in mutual fund schemes |
Scheme Selection based on the investment strategy of mutual funds |
Selection of Mutual Fund scheme offered by different AMCs or within the scheme category |
Selecting options in mutual fund schemes |
Do’s and Don’ts while Selecting Mutual Fund Schemes |
Registration & Enrollment Process
Now that you know about the pattern and syllabus of the NISM V-A Examination, it’s time to see the enrollment process.
Follow these simple guidelines to register and appear for your NISM V-A exam:
STEP.1:
First, fill in the required details for registration, and attach the following: a passport-size photo
a softcopy of your PAN card
valid proof of address.
Verify your details before clicking the submit option.
STEP.2:
Upon completion, you will receive the NISM registration number and an account activation link to your registered e-mail addresses. Activate your NISM account by clicking on the link.
STEP.3:
Log in to your NISM account and proceed to register for the examination. Click on the “enrolment for examination” on the profile page.
STEP.4:
Select the city and desired examination center to check seat availability.
STEP.5:
After selecting the desired location, seat, and time slot, proceed to pay the fees through the chosen payment gateway. You will receive a confirmation through e-mail & SMS after successful payment.
STEP.6:
Download the softcopy of the study material or workbook available on the NISM website. You may purchase a hard copy of the same.
STEP.7:
Do not forget to carry the following on the day of your exam:
Printout of Admit Card downloaded from the NISM account enrolment tab
Copy of any valid identity proof
The invigilator shall allow candidates to appear for the exam after due verification.
Some Tips & Tricks to Ace Your NISM V-A EXAM
Here are some essential tips to guide you in your preparation.
A common mistake candidates make is to purchase a large variety of reference materials and get confused about which ones to use. They should simply follow the official workbook available on the portal for preparation.
The next crucial step is planning and practice. Create and follow an effective study plan to cover each lesson/topic. Keep practicing the challenging concepts. Stay consistent and focused in your preparation.
During the exam, plan your time sufficiently to attempt the full 100 marks in 2 hours. Attempt the easy questions first to get more time to solve the tougher ones.
NISM offers mock tests that have helped candidates prepare for their V-A Certification Examination. These mock tests not only aid in measuring the preparation level but also make candidates familiar with the exam pattern, thereby reducing anxiety on exam day. Click here to give a try of the mock tests.
Click here to receive more expert tips and guidance.
What Are the Credentials Provided by NISM?
NISM offers a range of certifications designed to enhance the qualifications and skill sets of individuals from various educational backgrounds. Whether you're a professional, an employee, or a student, these certifications can add significant value to your resume.
Here are the primary certifications available through NISM:
Series I: Currency Derivatives Certification Exam
Focuses on the fundamentals of currency derivatives markets, products, trading strategies, clearing, and settlement.
Series II: Registrars to an Issue and Share Transfer Agents Certification Exam
Covers the critical aspects of the roles and responsibilities of registrars and share transfer agents.
Series III: Securities Intermediaries Compliance (Non-Fund) Certification Exam
Targeted at compliance officers and professionals dealing with non-funding activities in the securities market.
Series IV: Interest Rate Derivatives Certification Exam
Offers insights into the interest rate derivatives market, including products, trading mechanisms, and risk management.
Series V-A: Mutual Fund Distributors Certification Exam
Essential for those looking to become mutual fund distributors, touching upon sales, distribution, and regulatory facets.
Series V-B: Mutual Fund Foundation Certification Exam
Provides a foundational understanding of mutual funds, suitable for beginners in this field.
Series VI: Depository Operations Certification Exam
Focuses on the operations and regulatory environment of depository services in the securities market.
Series VII: Securities Operations and Risk Management Certification Exam
Aimed at those involved in back-office functions and risk management within the securities sector.
Series VIII: Equity Derivatives Certification Exam
Offers comprehensive knowledge about equity derivatives, trading strategies, and market mechanisms.
Series IX: Merchant Banking Certification Exam
Designed for professionals engaged in investment banking and related advisory services, covering the regulatory and operational aspects.
Series X: Investment Adviser (Level 1 and Level 2) Certification Exams
Provides the foundational and advanced knowledge required for investment advisers, including financial planning and product knowledge.
By earning these certifications, individuals can significantly boost their expertise and career prospects in the financial and securities markets.
Results & Revalution
You will get the results of the NISM V-A examination immediately upon completion. The evaluation is electronic and without any human intervention. Thus, there’s no option for revaluation.
Upon successful completion of the examination and announcement of results, a Digital Certificate will be displayed and mailed to you. You will also be notified via email & SMS.
Important Note
You must possess a valid PAN card, the details of which must be submitted either while registering for the examination or before the receipt of certification. Without the PAN verification, you will not receive the NISM V-A Certificate.
Validity of the NISM V-A CERTIFICATE
The NISM V-A certificate is valid for three years from the issue date (or the exam date). You must complete the Continuing Professional Education (CPE) program or successfully pass another NISM V-A exam to renew the validity of the certification.
Bonus Point
Now that you know all about the NISM Series V-A Certificate let’s see what you can do next!
The NISM V-A certificate allows you to register with the Association of Mutual Funds in India (AMFI) as a Mutual Fund Distributor (MFD). You can empanel with the Asset Management Companies (AMC) and approach potential investors to grow your business.
But do you know? There are over 45 AMCs in India with over 3000 active mutual funds schemes. It can be quite daunting to choose AMCs and handle clients at the same time.
For that, we have got you covered! AssetPlus is the right place to empanel with not just a few but all the 45+ AMCs and kickstart your distributor business.
What is the benefit of partnering with us?
It's an entirely online platform for managing your business combined with expert personnel to guide you during times of doubt. Register with your ARN to onboard new & existing clients hassle-free and take your business to the epitome of success.
In addition, you get complete support from qualified and trusted professionals to manage compliance and grievance issues and build and promote your business through business development guidance and co-branded marketing materials. Also, stay updated on the latest market information and trends through our comprehensive research materials.
It’s time to become an expert in the field of mutual funds & help investors by becoming their trusted investment advisor.
Start your business today. To know more, click here to WhatsApp us.
Frequently Asked Questions
What is the passing score for the NISM V-A Certification exam?
The passing score for the NISM V-A Certification exam is 50%. This means you need to correctly answer at least 50 out of 100 questions to pass the exam.
How long is the NISM V-A Certification valid?
Can I retake the NISM V-A Certification exam if I fail?
Is there a specific time frame within which I need to complete the NISM V-A Certification exam?
Can I request special accommodations or support during the NISM V-A Certification exam?
Can I apply for the NISM V-A Certification exam if I am not an Indian citizen?
Are there any prerequisites or prior certifications required to appear for the NISM V-A Certification exam?
Can I reschedule my NISM V-A Certification exam if I am unable to attend the originally scheduled date?
Can I use a calculator during the NISM V-A Certification exam?
How long does it take to receive the NISM V-A Certification exam results?